Inter-Tel's Self-Service Model Improves Loyalty and Costs
11 July 2003
Robert P. Desisto
Document Type: Research Note
Note Number: CS-20-2532
Inter-Tel implemented Oracle's iStore sell-side electronic-commerce platform to move from manual, paper-based order management to self-service.
What You Need to Know
Inter-Tel is an excellent example of moving paper-based manual processes to a self-service environment. Self-service applications provide cost-saving benefits, such as reduced staff; provide better cash flow by shortening accounts receivable; and increase partner "mind share" and loyalty by making it easier for the partners to do business with Inter-Tel. Any enterprise that is still using manual processes for order management with its channel partners should consider moving to a self-service support model.
Analysis
Inter-Tel was founded in 1969 with the objective of bringing cost-effective advanced telecommunications systems to businesses. It now positions itself as a single-source provider of business communications solutions. Inter-Tel sells more than 6,000 stock-keeping units through more than 400 dealers and 50 direct offices worldwide to its business customers. In November 2001, Gartner published a case study on Inter-Tel's implementation of Webridge's partner relationship management solution (see "Inter-Tel Increases Partner 'Mind Share' and Loyalty"). The Webridge solution helped Inter-Tel merge several prior splintered Web sites and provide highly targeted/personalized content delivery to the dealers. As part of a continuing effort to make it easier for its dealers to do business with it, Inter-Tel also implemented Oracle's sell-side commerce platform, Oracle iStore 11i. Inter-Tel's key challenge was to make it easier for its resellers to do business by improving order management and account management processes.
Problem
Inter-Tel's high sales growth had outstripped its ability to manage order and accounting processes. All order processing was still being handled via phone and fax. Dealers were dependent on call center agents for finding basic information, such as shipment status or accounts-receivable data. The increase in order traffic made it hard for the call center to keep pace with dealer requests, making it difficult for dealers to conduct business. Inter-Tel also had a time delay for price changes and promotions to get to dealers. The delay meant that dealers were quoting products with out-of-date pricing, causing billing disputes that led to a higher-than-normal volume of accounts receivable.
Objective
Provide a Web-based order management system to the Inter-Tel dealer channel, enabling "self-service." The self-service Web site would make it easier for dealers to do business with Inter-Tel and reduce re-keying inefficiencies and errors compared with paper-based manual processes.
Approach
Inter-Tel wanted to provide its more than 500 partners with a Web-enabled sales channel tool, allowing them to place self-service orders, check order status and review related accounting transactions. In March 2001, Inter-Tel kicked off the formal requirements-gathering process and evaluated prospective implementers. Divine/Whitman-Hart was selected based on the requirements analysis, bid price and schedule constraints. The project team consisted of members from both companies (see Note 1). Inter-Tel and Divine/Whitman-Hart distributed the load of the project (see Note 2) equally.
Note 1
Project Team
Inter-Tel information technology project team members — a senior project manager, technical analyst, senior software developer and user interface designer from Inter-Tel; two business analysts; one database analyst; and a part-time developer
Divine/Whitman-Hart team members — technology department; and a program manager, two analysts, and four software developers
Note 2
Inter-Tel and Divine/Whitman-Hart Project Responsibilities
Inter-Tel Responsibilities
- Requirements/functional specifications
- Maintenance of development environments
- User interface design and modification
- Catalog data migration and transformation
- Basic Oracle setup in 10.7, 11i, iStore
- Integration testing
- Beta site management
Divine/Whitman-Hart Responsibilities
- Interface/replication schema design
- Technical specification
- All custom coding except parts of the user interface
- Unit testing
- Assist Inter-Tel whenever Inter-Tel couldn't handle load
The specific software functional requirements were developed through internal (for example, sales and customer service) and external dealer interviews. Inter-Tel interviewed 50 to 60 individuals who represented all key site users, including a mix of experienced loyal, skeptical or critical dealers. It was essential that orders could be placed or tracked at any time and from any partner location in the world. Inter-Tel had already deployed Oracle 10.7 Order Management and was planning to upgrade to Oracle 11i Order Management in the second half of 2001. Inter-Tel believed that, because of the tight integration requirements (for example, material management, shipping information and pricing) with Oracle Order Management, a third-party best-of-breed choice for sell-side commerce was not a viable option. The decision was either to implement Oracle iStore or build a custom application on top of Oracle. Although, at the time, Oracle iStore was not proven in business-to-business environments, Inter-Tel decided the integration benefits justified moving forward with Oracle. During the implementation, Inter-Tel had to customize iStore to meet its requirements, particularly in managing screen "real estate" (for example, aligning action buttons with data fields).
Inter-Tel paid particular attention to providing personalized training to ensure that all of the dealers understood how to use, and understood the value of, the self-service application. The dealers were sold on the benefits, such as online order entry and 24x7 access to shipment data. The dealers were ready to make the switch — the only challenge was that the system had to work, which it did. The system proved to handle the dealer load volume and has had no failures or outages to date.
Results
Since Oracle iStore was deployed on 1 August 2001:
- Ninety percent of Inter-Tel's orders come through the Web, allowing it to reduce its inside sales staff significantly.
- Adoption by channel partners has been very high, with almost full acceptance across the entire partner channel experienced within six months of launching the site. This will allow Inter-Tel to realize additional efficiencies.
- There has been almost a 90 percent decrease in error rates as a result of self-service ordering.
- It has reduced or redeployed 50 percent of its staff in the order-processing area.
- Accounts receivable and days sales outstanding have been reduced by $8 million, largely because of increased order and pricing accuracy.
Critical Success Factors/Lessons Learned
Inter-Tel stated that the following eight factors were most critical to the deployment:
- Strong executive commitment
- Strong project management
- A deeply experienced third-party integrator
- A small team
- Rigorous requirements analysis and attention to user interface design
- Sales department buy-in
- Heavy involvement of beta users (from the largest dealers)
- Personal attention to training, and introduction of online order and tracking to dealers
Key Issue
How will technology impact the evolution of sales channel and customer relationships?
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